Google has just announced that it has entered into an agreement to acquire Motorola Mobility for $12.5 billion. The search giant will be paying $40 per share, a premium of 63% from the closing price of Motorola's shares from last Friday. The actual acquisition is expected to take place in late 2011 or early 2012 pending regulatory approvals.

A partnership between the developer of the Android platform and a top 3 Android device manufacturer is likely to light a fire beneath the likes of Samsung, HTC, LG, and other Android partners. However, to quell their fears Google's press release clarifies that Motorola "will remain a licensee of Android and Android will remain open... [and] Google will run Motorola as a separate business." Furthermore, Andy Rubin, SVP of Mobile at Google, reiterates that while the acquisition will "break new ground for the Android ecosystem... [Google's] vision for Android is unchanged and Google remains firmly committed to Android as an open platform and a vibrant open source community". Google has been very careful in its statement not to isolate its partners at a time when patent litigation could potentially destabilize Android's growth.

In fact it appears that part of the motivation behind this acquisition is to obtain Motorola's considerable mobile patent portfolio which stretches back over 80 years. Larry Page, CEO of Google, states that the "acquisition of Motorola will increase competition by strengthening Google’s patent portfolio, which will enable [Google] to better protect Android from anti-competitive threats from Microsoft, Apple and other companies".

Finally, it is unclear at this point whether Google will use Motorola's manufacturing expertise to create the next Google-branded Nexus device or whether it will simply allow Motorola to continue making Droids. At the very least, hopefully this is last we will see of the abomination that is MotoBlur!

If you are interested in hearing more about Google's acquisition, tune in to the live webcast (registration required) of their conference call with financial analysts.

MOUNTAIN VIEW, CA and LIBERTYVILLE, IL – AUGUST 15, 2011 – Google Inc. (NASDAQ: GOOG) and Motorola Mobility Holdings, Inc. (NYSE: MMI) today announced that they have entered into a definitive agreement under which Google will acquire Motorola Mobility for $40.00 per share in cash, or a total of about $12.5 billion, a premium of 63% to the closing price of Motorola Mobility shares on Friday, August 12, 2011. The transaction was unanimously approved by the boards of directors of both companies.

The acquisition of Motorola Mobility, a dedicated Android partner, will enable Google to supercharge the Android ecosystem and will enhance competition in mobile computing. Motorola Mobility will remain a licensee of Android and Android will remain open. Google will run Motorola Mobility as a separate business.

Larry Page, CEO of Google, said, “Motorola Mobility’s total commitment to Android has created a natural fit for our two companies. Together, we will create amazing user experiences that supercharge the entire Android ecosystem for the benefit of consumers, partners and developers. I look forward to welcoming Motorolans to our family of Googlers.”

Sanjay Jha, CEO of Motorola Mobility, said, “This transaction offers significant value for Motorola Mobility’s stockholders and provides compelling new opportunities for our employees, customers, and partners around the world. We have shared a productive partnership with Google to advance the Android platform, and now through this combination we will be able to do even more to innovate and deliver outstanding mobility solutions across our mobile devices and home businesses.”

Andy Rubin, Senior Vice President of Mobile at Google, said, “We expect that this combination will enable us to break new ground for the Android ecosystem. However, our vision for Android is unchanged and Google remains firmly committed to Android as an open platform and a vibrant open source community. We will continue to work with all of our valued Android partners to develop and distribute innovative Android-powered devices.”

The transaction is subject to customary closing conditions, including the receipt of regulatory approvals in the US, the European Union and other jurisdictions, and the approval of Motorola Mobility’s stockholders. The transaction is expected to close by the end of 2011 or early 2012.

Comments

Please no one says "Nexus Prime" will be from Motorola...
that has NOTHING to do with this deal... Nexus Prime should be already in production by now for a near release... so, if it was already a Moto production then it is (i doubt it) but if it was someone else's production then it can't be Motorola by now... !!!
just to clear things up (i'm sick of people saying that Nexus is gonna be from Moto based on this news!!!)
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---Dr.DarknesSx---
Google | Ambassador at KAU

aj

Yeah, I agree. I'm sure the next Nexus is just about finished already. MAYBE Motorola will do the next Nexus, but this one (prime) will in no way be effected by this deal.

Craig

I agree, this move will impact the Nexis 4 (whatever it ends up being named), not the Nexis Prime.

(Although it could be a hint that the Prime was being made by Moto anyway)

Hopefully this is the end of motoblur Google takes peices of Motoblur & applies them to stock Such as the widgets cause leymts face it google needs more of their own widgets & cool 3d like effects of the D3 if they can fix the little lag. Also maybe if Motorola makes Nexus Prime or any nexus in the near future we can get a laptop dock but this time with Google Chrome. Hopefully. unlocked bootloaders for all

Bilgediver

Ive always thought Motorola has the best hardware out of the top Android Manufacturers, but their Software has been lacking, maybenthis will partner the best Hardware with the Best Android has to offer.

Jim

i imagine shit will just go about as usual after this. moto will still continue to ruin devices with their no longer so called "motoblur". hopefully, this acquisition will make it possible for google to possibly alter that shitty skin, but i have a feeling they won't put a stop to it. guess only time will tell

Breaking News, Google also acquires HTC, and Samsung. Google starts making beautiful screens for android with Samsung's manufacturing plants and amazingly smooth devices with HTC's engineering expertise. Google CEO says "the only thing we wanted from moto was their patents... not really sure what else to do with them"

They just forced MS and BS (err Apple) to pay over the top for Nortel as they knew this was going to blow the patent game wide open.

ocdtrekkie

I am... giddy with joy about this acquisition. I love Motorola devices, in my opinion, they have always been the best Android has to offer, however, apart from the Droid 1 and the Xoom, (both of which I own), they have been plagued with Motoblur.

Thats friggin awesome.. The patent war is about to change side.. I m just hoping that google wont get greedy and favor its affiliate company over the others to some extent.. Lets see how htc,sammy,lg react to this?

Elvis

I hope this has an effect on current moto devices... and maybe the bionic? *reconsiders buying moto for next device*

IamBeast

I'm neither a fanboy of Apple or Google, but this is really exciting news. Now that Google might be able to acquire Moto's patents, Apple will stop suing and start innovating again like they have in the past and that will make Google and Microsoft innovate as well. Seems this acquisition, if it's allowed, will help all smartphone owners.

Kevin

Apple start innovating again??

Wow. You SURE you're not an Apple Fanboi?

Brooke Grant

Apple hasn't innovated anything. They just take concepts and ideas that someone else invented and repackage them as their own.

You seriously don't think Apple invented touchscreens do you?

MP3 players?

Tablets?

Multitasking?

Folders?

If you answered yes to any of these, you need to look into things a bit more.

shaneaus

Sheds new light on last weeks Motorola patent announcement. Hmmm.... Motorola talks about the strength of their patent porfolio as Google makes plan to purchase in the background.

Hidden message for other companies not to sue over patents?.....

SiliconAddict

I'm normally not one to post something like this, but its LITERALLY the first thing that came to mind on the topic.

LOL, let's see now how much will Apple and MS be compelled to pay Google in royalties for each device sold! For all these stupid patents that have been awarded so far, I would not be surprised if Moto has in its portfolio something like "a mobile device to make and receive calls", and anyone producing a phone (read: Apple) will now have to pay Google!

Brilliant how they made those stupid greedy patent trolls pay a lot for the Nortel portfolio only to see that worthless now :)